Leader of state's health agency resigns

Lanier Cansler, head of the state Department of Health and Human Services, is leaving the department at the end of the month.

Gov. Bev Perdue named Al Delia, her senior policy adviser, as acting secretary.

Cansler did not return telephone calls Friday afternoon, but Perdue's office said he will be taking a job in the private sector. And in an unpaid role, he will be chairman of a commission for the governor on affordable health care.

In a prepared statement, Cansler praised Perdue's leadership.

"We cut spending, eliminated waste and consolidated agencies - all to make state government more efficient without neglecting our core mission of serving the people," the statement said.

Cansler, appointed in 2009, led the state's largest department during a challenging time. Medicaid, the government health insurance program for the poor and disabled, has a $149 million budget gap this year, and next year's budget hole is projected to be larger.

In an interview shortly after he started the job, Cansler said one of his goals was to implement new information technology systems. The department is now overseeing the state's largest services contract, the installation of a new Medicaid claims system. The project is millions of dollars over budget and will be finished nearly two years later than planned.

The contract was the subject of a scathing state audit that condemned weak department oversight. Cansler submitted a fiery written response, saying the audit was a waste of time. The audit findings renewed questions about an appearance of a conflict of interest because Cansler was a consultant for the contractor, Computer Sciences Corp., before Perdue picked him to lead one of the state's largest departments.

Despite these difficulties, legislators praised Cansler's leadership and knowledge.

"I think Lanier was one of the best secretaries in modern times in the department," Rep. Nelson Dollar, a Cary Republican and a health agency budget writer, said Friday.

The nature of running such a difficult department means that you never leave with all the work done and everything in perfect shape, Dollar said. Cansler, a former Republican legislator from Asheville, was a deputy secretary in the department from 2001 to 2005. That experience helped when he took the top job, legislators said.

"He did help clean up a number of problems, but obviously we still have a number of challenges that remain," Dollar said. "That's simply the nature of the department."

One of Cansler's biggest assets was his deep understanding of Medicaid, said Rep. Verla Insko, a Chapel Hill Democrat.

"We were fortunate to keep him as long as we did," Insko said. "He did a great job."

Cansler walked in to a department trying to manage a shaky public mental health system. Problems persist, and the state has hung renewed hopes for improvement on a move to transform local mental health offices into managed care organizations, which would have more control over spending, and private providers who work in their regions.

Vicki Smith, executive director of Disability Rights North Carolina, said she had a good relationship with Cansler.

"I believe that he probably had a good grasp of what needed to be done, but for a variety of reasons couldn't make the changes and improvements he believed would help," she said. The two talked about the problem of mentally ill patients spending days in hospital emergency rooms, she said, but he never had money to create enough alternatives.

The departure of Cansler, 58, had been rumored for months, but as recently as November he told legislators and others that he had no plans to leave. His resignation letter, dated Dec. 13, said he was proud of the department's progress.

"Despite all the political rhetoric, I will depart knowing that the Department of Health and Human Services has enhanced its ability to meet the needs of North Carolina residents in a more effective and efficient manner," he wrote.